AB InBev

Written by Andy Young, editor of The Shout

A former chairman of the Australian Competition and Consumer Commission (ACCC) has said that AB InBev’s takeover of fellow brewing giant SABMiller will come under tough competition scrutiny.

In particular the licensing deals for selling imported beers will come under scrutiny, especially Australia’s biggest selling imported beer, Corona.

Lion took over the rights to sell the brand, which has 5.9 per cent of Australia’s beer market, in 2012. But Corona is now owned by AB InBev, so if the takeover goes ahead as expected then the rights to Corona are likely to switch back to Carlton & United Breweries, which is owned by SABMiller.

The deal would also combine Australia biggest and third-biggest brewers, and it’s this aspect of the takeover which the former ACCC chairman Allan Fels says could prove a stumbling block in Australia.

“This deal will not have an easy ride through the ACCC,” Fels told Reuters. “The battle between second and third position often stimulates competition more generally in the market. In this case it’s not clear there is a lot of surrounding competition, and therefore it could be that a cosy duopoly emerges.”

Fels added that even if the deal does go through internationally, the ACCC can make rulings that would make a difference in Australia.

“It’s conceivable that the merger is blocked internationally,” Fels added. “But if it’s not, if it sails through overseas but is blocked here, they’d have to consider calling off this part of the transaction.”

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